REPORT 2007

To Shareholders and Investors
Business Report for the 74th Term
April 1, 2006 to March 31, 2007

100th Anniversary

Securities Code：6455

TOPICS

Morita Topics
Looking to the future of Morita
on our 100th anniversary
In April 2007, Morita celebrated its 100th anniversary. It is exactly 100
years since our founder, Shosaku Morita, established a Fire Protection
Association under private management in Osaka's Minami Ward in
1907, and started manufacturing fire extinguishers and fire pumps.
When the lifetime of corporations is said to be 30 years, thriving anddeveloping over a century is an astonishing achievement, and a
testament to the support of our shareholders and everyone involved in
the company.
We would like to express our gratitude for the support of ourshareholders, as well as our hopes for your continued support in the
future. In addition to the ordinary dividend (¥5 per share), we havedecided to pay a special dividend to commemorate the company's 100th
anniversary (¥10 per share), for a total end-of-period ¥15 per commonshare.
Over the last 100 years, motivated by the desire to save as many lives
as possible, Morita has made every effort to develop our firefighting
technologies, achieving the position of top domestic fire engine
manufacturer; and over the next 100 years, Morita will strive towards
our dream of being a global company with a worldwide presence.

Shosaku Morita, Founder
Our founder Shosaku Morita was born inWakayama on July 30, 1883, the oldest ofeight siblings. Shosaku was interested in
making things from a young age. Even today
the story goes that, gazing at the river
flowing near his home, he made himself oneof those predecessors to the fully fledged
pump: a water gun. Shosaku chose thelifelong path of engineering and in 1919, his
own technologies had won patents in England, America, France andGermany. Then, in 1922 he went to Europe for six months ofresearch and observation of fire engines, arranging technologicalcooperation with Benz of Germany. This resulted in dramatic
improvements in the quality of Morita's firefighting equipment.
In 1929, having established the foundations of today's Morita
Corporation and passed on his vision to the next generation ofengineers, our founder died. This vision, based on the manufacture ofladder trucks, spurred the development of the company.

01 

TOPICS

Morita's 100 years
1907 Shosaku Morita established a Fire Protection Association in
Osaka's Minami Ward
1910 He succeeded in developing Japan's first plunger pump with agasoline engine

Japan's first plunger pumpwith a gasoline engine

Morita pump fire engine

1928 Successfully manufactured a high performance Morita pumptruck with a 1,000-gallon per minute flow (the first in Japan withthis capacity)
1932 Established Morita Gasoline Pump Seisakusho Co., Ltd.
1933 Successfully manufactured Japan's
first wooden-ladder fire engines
1939 Changed the company name toMorita Pump Industries
1950 Successfully manufactured a fireJapan's first wooden-ladderengine with a 30m fully automatic
fire engines
mechanical metal ladder1951 Transferred the head office to its present location in Osaka
1957 Successfully manufactured a fire engine with a 12m hydraulicallyoperated ladder1960 Successfully manufactured Japan's
first snorkel vehicle (a fire engine
with an aerial platform)
1961 Changed the company name to Fire engine with a hydraulicallyoperated ladder
Morita Pump K.K.
1970 Through technological cooperation with Snorkel of America,
completed Asia's first squirt vehicle (folding articulated water tower)
1971 Successfully manufactured a fire engine with a 40m class ladder,
the only one of its type in Asia
1973 Listed Morita stocks on the Osaka Stock Exchange
1979 Listed Morita stocks on the Tokyo Stock Exchange
1985 Successfully manufactured the MLEX5-30 Super Gyro Ladderequipped with a gyroscopic automatic incline adjustment device
1986 Entered the disaster prevention facilities field
1990 Successfully manufactured a fire engine with a 50m ladder 

02

TOPICS

Top articulated ladder truck

Fire Fighting Ambulance

1994 Entered the environmental business field with such products as
a recycling facility and waste disposal facility
1997 Changed the company name to Morita Corporation
2000 Successfully manufactured a top articulated ladder truck with
fixed water piping
2002 Successfully manufactured a Fire Fighting Ambulance which
combined features of fire engine and ambulance2005 Took an equity stake in Sichuan Fire Safety Appliances Factoryin China
2006 Successfully manufactured a Hazmat Vehicle for responding toterrorism related disasters
2007 Successfully manufactured the Miracle CAFS Car that can put
out fires using 1/17 of the water previously used

Morita in the future
A new startFire engine production facilities presently
dispersed throughout Osaka Prefecture will be100th Anniversary
concentrated in Sanda City, Hyogo Prefecture.
The new production centre for fire engines will begin operation in
April 2008.
Innovative production methods will be pursued at the new factory,
incorporating production, repair and maintenance sections for
greater efficiency and improved quality. In addition, the site willfeature a systemized testing ground for automatically testing the

The planned Sanda New Factory01
03 

TOPICS

water discharge capacity of fire engines. It will also have a test
course with uneven terrain, gradients and other challenging
features, a foam testing ground with environmental safeguards andmany other facilities for comprehensive testing of the whole range offire engines.
In addition, the site will include training facilities for basic fire anddisaster prevention know-how, fire engine driving skills, andoperation of ladder trucks, as well as research facilities for raisingfire prevention awareness in the local community. It is planned as abase for rapid expansion around the world in the new century, 101
years after our founding.

Morita goes worldwide
In December 2006, we entered a cooperative selling agreementwith the German fire engine maker Magirus for aircraft rescue
and fire fighting vehicles in the Asian region. Magirus will
provide its products on an OEM basis, using Morita's brandpower to expand sales in the Asian region. Also, this year, theGroup company Morita Technos Corporation entered into a
distribution agreement with Magirus, taking on responsibility forsales and maintenance within Japan. Based on a comprehensive
cooperative system, we have been able to provide a wider
selection of products in oversea markets as well.
At the same time, the Environmental Business Division entered into
an agreement in October 2006 with SGM Gantry S.p.A. of Italy
regarding the domestic manufacture and sale of magnetic separator
and inductive sensor separator. SGM specializes in magnetic
separation and related equipment, and is evaluated highly around theworld for its technicalcapabilities. At the N-EXPO
2007 (May 22〜25, 2007), we
exhibited the SIS Eddy
Current Separator, promoting
awareness of Morita's entry into
the environmental field.

As a corporate citizen protecting human life and mother earth, Morita
will globally expand its horizons. Not only will we continue to undertakethe production, sale, and maintenance of firefighting equipment,
especially fire engines, we will continue our corporate activities aimed
at reducing harm to the environment and for a greener earth.
 

04
02

TOP MESSAGE

Message from the President
On behalf of the company, I would like to express our gratitude to ourshareholders for their support.
On the opportunity of the Report for the 74th Period, I would like toreport on the general outlook for sales.

Overview of Operations
In the current consolidated fiscal year, Japan's economy is seeing
increased capital investment thanks to a recovery in corporate earnings
and an improved employment situation, suggesting an economic
turnaround.
In this business environment, each division of the Group strove toimprove the overall strength of the Group through vigorous sales
activities combined with efforts to reduce costs and operating expenses
in order to strengthen profitability.
However, our business performance in this consolidated fiscal year
was significantly impacted by reduced sales of high-end fire enginesfrom the Pump Division, with sales of ¥41,592 million, down ¥3,821
million (8.4%) compared with the same period last year. Operating profit
fell by ¥1,153 million to ¥2,096 million (down 35.4%); ordinary income
fell by ¥1,043 million to ¥2,376 million (down 30.5%); and current net
profit fell by ¥764 million to ¥1,336 million (down 36.3%).

● Overview by Division

Disaster Prevention
Business

05

REPORT 2007

Environmental BusinessTOP MESSAGE

蚪 Disaster Prevention Business（Millions of yen）
Net Sales
35,00030,00029,85331,26027,67426,60525,00020,00015,00010,0005,000
02004.3 2005.3 2006.3 2007.3

In the Pump Division, volume of sales was significantly impacted
by reduced sales of such products as ladder trucks and water
towers, at ¥27,674 million, down ¥3,585 million (11.4%), and an
operating profit of ¥1,530 million, down ¥1,181 million (43.5%)
compared with the same period last year.

蚪 Environmental Business（Millions of yen）
Net Sales
20,00015,000

15,486

14,722

14,51913,07010,0005,000
02004.3 2005.3 2006.3 2007.3

Volume of sales fell by ¥203 million to ¥14,519 million (down
1.3%), however the Guillotine Press and Scrap Baling Press of theIndustrial Equipment Division made a strong showing with anoperating profit of ¥566 million, up ¥29 million (5.5%) comparedwith the same period last year.

Issues to be handled by the Group(1) With the expansion of regions due to the merger of municipalities
and changes in subsidy systems, local governments, our main
customers, are revising their plans for maintaining fire engines.
This has led to an ongoing situation of dormant demand. In orderto prevail in this tough environment, Morita will develop products

REPORT 200706

TOP MESSAGE

for disaster response that meet customer requirements, offeringsafety and reassurance, thereby creating demand.
Firstly, we developed the Miracle CAFS Car that can put out fires
using 1/17 of the water previously used. This is positioned as aninnovative product with the potential to fundamentally change
firefighting activities, and we are undertaking sales aggressively
both in Japan and overseas. It is expected to assist in efficient firefighting when little water is available after a major earthquake. It
will also help to prevent the problem of secondary disasters fromwater damage when fighting fires in apartment blocks and similarbuildings.
Next, we will launch products such as a high performance laddertruck that is three times as effective in saving lives. We aredeveloping vehicles with superior design, using plastic for thevehicle body to reduce weight.
(2) Although the domestic market for fire engines is flat, the Southeast
Asian market, principally in China, and the Middle Eastern market
are characterized by sales of some three thousand vehicles a year
(about three times that of the domestic market), and further
expansion is expected. In response, Morita will expand its dealershipnetwork and secure production centers in China and Vietnam in order
to expand sales in overseas markets.
(3) The Fire Extinguisher Division is working towards achieving a
recycling-oriented society. To this end it has started a system forrecovering waste fire extinguishers known as the "Circle Morita
Eco", recycling the fire extinguishing agents or converting them tofertilizer, and reutilizing the containers of waste extinguishers. In
addition, in response to fires in group homes for the elderly andthe subsequently tightened regulations, Morita is actively
promoting sales of its SPRINEX easy-use firefighting equipment.
I trust that we can count on your ongoing support as Morita continues
to grow.

June, 2007

Masahiro Nakajima
President

07

REPORT 2007

FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSNet Sales

Ordinary Profit
Non-consolidated
Consolidated（Millions of yen）
50,00045,41342,19741,643

41,592

Non-consolidated
Consolidated
3,419（Millions of yen）
3,500
3,073

3,000

40,000

2,647

2,623

2,500
30,00030,63527,89130,06525,996

2,333

1,522

1,500

20,0002,376

2,000 1,930

1,000
10,000500
002004.3 2005.3 2006.3 2007.3

Net Income

Return on Assets（ROA）
Non-consolidated
Consolidated（Millions of yen）
2,500

2004.3 2005.3 2006.3 2007.3（Consolidated）

（％）
7

2,101

2,000

1,500

1,568

5.4
1,357

1,336

5

1,100

1,002

1,000

4.7

4.0

4

500

0

3
2004.3 2005.3 2006.3 2007.3

Shareholders' Equity Ratio（Consolidated）（％）
60

Interest-Bearing Liabilities（Consolidated）（Millions of yen）
15,00010,00052.3
51.0

2004.3 2005.3 2006.3 2007.3

10,875

53.4

50

6.0

6

1,801
1,678

8,182

50.2

7,312
6,230

5,000

40

0
2004.3 2005.3 2006.3 2007.3

2004.3 2005.3 2006.3 2007.3

REPORT 200708

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Summary
Consolidated Balance Sheets
Morita Corporation and Consolidated Subsidiaries
As of March 31, 2006 and 2007
Millions of yen

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets
Liabilities
Current liabilities
Long-term liabilities
Total liabilities
Minority interests in consolidated subsidiaries
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Unrealized gains (losses) on revaluation of land
Unrealized gains on available-for-sale securities

Treasury stock, at cost
Total shareholders’ equity
Total liabilities and shareholders’ equity
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Unrealized gains (losses) on revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

09

REPORT 2007

2006

2007

¥ 22,384¥ 24,294

26,887

27,211

185

161

9,131

7,498

¥ 58,590¥ 59,165¥ 18,884¥ 18,248

8,765

10,94727,65029,195

280

−

4,746

−

4,346

−

20,336

−

(4)

−

2,845

−

32,269−(1,610)−30,659−¥ 58,590

−

4,746
4,365
21,127(2,321)
27,917

1,734
(4)
(4)
40
1,765
286
29,969¥ 59,165

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2006 and 2007
Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income
Other expenses
Income before income taxes
Income taxes
Current
Deferred

Minority interests in earnings of consolidated subsidiaries
Net income

2006

2007

¥ 45,413¥ 41,592

33,691

31,054

11,722

10,537

8,472

8,441

3,249

2,096

640

1,037

318

632

3,571

2,500

1,062

1,105

408

47

1,470

1,152

(0)

11

¥ 2,101¥ 1,336Yen

Per share of common stock
Basic net income
Diluted net income
Cash dividends applicable to the year

2006

2007

¥ 45.61¥ 31.05

45.39

30.98

10.00

20.00 *

*Includes 100th anniversary commemorative dividend of Yen 10.00

Consolidated Statements of Cash Flows
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2006 and 2007
Millions of yen

2006

2007

Cash flows from operating activities¥ 4,676¥ 3,597

Cash flows from investing activities(2,250)(1,038)Cash flows from financing activities(3,045)(69)

Net increase (decrease) in cash and cash equivalents

(619)

2,489

Cash and cash equivalents at beginning of year

2,947

2,366

39

−

¥ 2,366¥ 4,856

Cash and cash equivalents of newly consolidated subsidiaries,
net excluded subsidiaries from consolidation
Cash and cash equivalents at end of year

REPORT 200710

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Changes in Net Assets(in millions of yen)

Morita Corporation and Consolidated Subsidiaries
For the Year Ended March 31, 2007
Shareholders’ equity
Commonstock

Balance at March 31, 2006

¥ 4,746

Additional
paid-in capital¥ 4,346

Retainedearnings¥ 20,336

Total
Treasury stock, shareholders’at costequity¥ 27,818(¥ 1,610)

Amount of change
Cash dividends*

(240)

(240)

Cash dividends

(216)

(216)

Bonuses to directors

(85)

(85)

Net income

1,336

1,336

Acquisition of treasury stock
Disposal of treasury stock

(795)

(795)

84

102

18

Decrease due to changes
in scope of consolidation

(3)

(3)

Net changes other thanshareholders’ equity
Total changes
Balance at March 31, 2007

−

18

791

(711)

99

¥ 4,746¥ 4,365¥ 21,127(¥ 2,321)¥ 27,917

Valuation and translation adjustments
Minority
Unrealized Deferred Unrealized
Foreign interests in
Total
gains on
gains
gains
currency
net assets
available(losses)on translation consolidated(losses)subsidiaries
for-salerevaluation adjustments
securities on hedgesof land

Balance at March 31, 2006

¥ 2,845

−

(¥ 4)

−

¥ 280 ¥ 30,939

Amount of change
Cash dividends*(240)

Cash dividends(216)

Bonuses to directors(85)

Net income

1,336

Acquisition of treasury stock(795)

Disposal of treasury stock102

Decrease due to changes
in scope of consolidation(3)

Net changes other thanshareholders’ equity(1,111)

(4)

−

40

Total changes(1,111)

(4)

−

40

Balance at March 31, 2007

¥ 1,734

(¥ 4)

(¥ 4)

¥ 40

*Appropriation of income decided at the general shareholders’ meeting in June 2006

11

REPORT 2007

6

(1,069)6(969)¥ 286 ¥ 29,969

NON-CONSOLIDATED FINANCIAL STATEMENTS

Nonconsolidated Summary
Nonconsolidated Balance Sheets
As of March 31, 2006 and 2007
Millions of yen

2006

2007

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets¥ 15,630
25,449162
10,928¥ 52,172¥ 16,651
25,775129
9,288¥ 51,843

Liabilities
Current liabilities
Long-term liabilities
Total liabilities¥ 14,866
8,015
22,882¥ 13,644
10,20523,850Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Unrealized gains on revaluation of land
Unrealized gains on available-for-sale securities
Treasury stock, at cost
Total shareholders’ equity
Total liabilities and shareholders’ equity

4,746
4,346
19,026(4)
2,785(1,610)29,289¥ 52,172

−
−
−
−
−
−
−
−

Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Total shareholders’ equity

4,746
4,365
19,512(2,321)
26,303

Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Unrealized gains (losses) on revaluation of land
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

1,699
(4)
(4)
1,690
27,993¥ 51,843

Nonconsolidated Statements of Income
For the Years Ended March 31,2006 and 2007
Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income
Other expenses
Income before income taxes
Income taxes
Current
Deferred
Net income

2006¥ 30,065
23,150
6,914
5,032
1,881
1,024
464
2,442

2007
¥ 25,996
20,226
5,770
5,016
753
1,720
788
1,685

640
444
¥ 1,357670
13¥ 1,002

REPORT 2007

12

CORPORATE DATACORPORATE DATA
(current as of March 31,2007)

Overview
Founded : April 23,1907
Established : July 23,1932
Paid-in capital : JPY4,746mil
Osaka Head Office : 5-20, 5-Chome, Shojihigashi, Ikuno-ku,
Osaka City, Osaka, 544-8585
Tokyo Head Office : 25-31, 3-Chome, Nishishinbashi,
Minato-ku, Tokyo, 105-0003
Primary Products
Pump Division
Manufacture and sale of fire engines with ladders,chemical trucks, ordinary fire engines, other fire fighting
vehicles and specialty vehicles.
Disaster Prevention Division
Manufacture and sale of disaster prevention equipment
including dry chemical fire extinguishers and design,conservation and inspection of disaster prevention
facilities.
Environmental Business Division
Design of waste recycling facilities and other waste
disposal facilities and manufacture and sale of large
hydraulic equipment.

Group Companies
Morita Econos Corporation

Morita Technos Corporation

Morita Sogo Service Ltd.

Ueno Morita Ltd.

Morita UG Ltd.

Morita Engineering Corporation

ALUVO.CO.,LTD.

Hokkaido Morita Corporation

Kagoshima Morita Pump Ltd.

Morita Toyo Corporation

Sichuan Morita Fire Safety Appliances Limited Company
Nanjing Chenguang Morita Environment Protection Science& Technology Co., Ltd
MORITA HOLDRICH (HONGKONG)COMPANY LIMITED13

REPORT 2007

DIRECTORS, AUDITORS AND EXECUTIVE OFFICERSDIRECTORS, AUDITORS ANDEXECUTIVE OFFICERS
Chairman & CEO

Toshio Shinmura

President

Masahiro Nakajima

Executive Vice President

Masaaki Onji

Managing Director

Naoyuki Murai

Managing Director

Eiji AsadaManaging Director

Yukihiro Maehata

Managing Director

Kazuhiko Nakata

Director

Kenichi Kitamura

Director

Kazuhiro Tsuchiya

Full-Time Corporate Auditor

Kyo Hirose

Full-Time Corporate Auditor

Kazunari Nishida

AuditorKazuyoshi Matsumura

Auditor

Masaoki Shibata

Corporate Executive Officer

Michihiro Ichihara

Corporate Executive Officer

Toshihiko Iwamuro

Corporate Executive Officer

Akira Koga

Corporate Executive Officer

Fumikazu Hashimoto

REPORT 200714

Shareholder's Memo
Operating Year : April 1st to March 31st
Annual General Meeting of Shareholders : June
Schedule : Ordinary General Meeting of Shareholders−March 31stYear-end Dividend−March 31st
Interim Dividend−September 30th
Other dates publicised in advance as necessary
Method of Publicity : Posted on company website.
http://www.morita119.com/kohkoku/index.html
Shareholder Register Administrator :The Sumitomo Trust & Banking Co.,Ltd.
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka
Administrator's Office : The Sumitomo Trust & Banking Co.,Ltd.
Stock Transfer Agency Department
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka(Postal Address)

The Sumitomo Trust & Banking Co.,Ltd.
Stock Transfer Agency Department
1-10 Nikko-cho, Fuchu City, Tokyo 183-8701(Telephone Enquiries)(Requests for change of address forms) +81-120-175-417(Other enquiries) +81-120-176-417(Internet Website URL)
http://www.sumitomotrust.co.jp/STA/retail/service/daiko/index.html
Agent : The Sumitomo Trust & Banking Co.,Ltd.
All branches throughout Japan
Stock Listing : Tokyo Stock Exchange
Osaka Securities Exchange

Please visit our website
for the latest investor relations information.

http://www.morita119.com

Osaka Head Office : 5-20, 5-Chome, Shojihigashi, Ikuno-ku, Osaka City,
Osaka, 544-8585
蕁 +81-6-6756-0100
Tokyo Head Office : 25-31, 3-Chome, Nishishinbashi, Minato-ku,
Tokyo, 105-0003
Made 100%
蕁 +81-3-5777-5777
from recycled paper.

http://www.morita119.com

Printed using environment
friendly soy ink.

Printed on recycled paper.